Comparative advantages, taxes

Discussion in 'Economy' started by Baruch Menachem, Nov 20, 2010.

  1. Baruch Menachem
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    Baruch Menachem '

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    Every year Forbes publishes a tax misery index. It lists all the taxes the TOP marginal taxpayer would pay in each locale.

    There are lots of surprises here. China is the state with the highest tax rate.
    The US, for all the whining of us on the right, is actually pretty far down on the list. (though if we added in the cost of insurance, we might zoom way up...)


    the weakest European states are pretty near the top. (Greece and Spain and Portugal) As are powerhouses like Norway and Sweden. Israel, for all its socialist talk, is way down near the middle. Communist Vietnam is lower yet, not a whole lot higher than tax rates in Texas, supposedly very business friendly. And Russia is a great deal lower than that.

    Ireland is also in trouble, but it is pretty far down on the tax rates.

    An interesting part of the tax picture is the geezer support taxes, which are huge in some places, like Ukraine, mexico, china, pretty much all of europe except Switzerland. In Asia, South Korea, Vietnam, and Japan all have low Geezer support taxes, but cultural mores mean this is shifted on to the citizens in a very large way. In Asia, four generation households are normal. All this cost is a real part of the expense of raising a family, so there is a huge tradeoff here that we don't see. The US has the lowest taxes to support the elderly in the west. Even the UAE, which has no other taxes, still has higher geezer taxes than the US. In most places, this tax falls on the employer, rather than on the worker. In the US, it is equally shared. Israel and the UAE are kind of weird in that the employee pays the larger share.


    It is a cool chart.

    [​IMG]
     
  2. william the wie
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    william the wie Gold Member

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    Basically a bump, nice topic I would like to follow.
     
  3. loosecannon
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    loosecannon Senior Member

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    Nice chart, too bad the values are not expressed as some kind of % rather than as some mystery unit called "misery".

    Got a link to the source?
     
  4. Baruch Menachem
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    Baruch Menachem '

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    You can find it here, but all they have on this page is just the chart.

    There is a collection of charts here.

    One of the problems of the chart is it adds taxes on different income sources together, so you get numbers that are don't make a whole lot of sense, but the point of the exercise is to have some basis of comparison where countries are compared to each other

    Standardization is hard. The Economist tries to make for a standard idea with PPP and the big mac, but even here, getting a handle on reality is hard.
    [​IMG]

    PPP argues that a big mac should cost the same in all countires, but in china, labor costs for a worker are 40 cents an hour, in the US, wages are (net to the employer after taxes etc) somewhere in the region of $11 an hour. Though why the big mac costs nearly $6 in Brazil is a mystery. The big mac index assumes all inputs are pretty much equal. Which is just not the case. But this is best handle on currency issues I have yet seen
     
  5. loosecannon
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    loosecannon Senior Member

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    well this one is actually pretty good, Baruch

    [​IMG]
     
  6. Baruch Menachem
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    Baruch Menachem '

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    Would be cool to stack it against the unemployment rates
     
  7. antagon
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    antagon The Man

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    interesting, indeed. i wonder what explains the discrepancy between the OP chart and cannon's oecd-derived one. check out mexico.
     
  8. Baruch Menachem
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    Baruch Menachem '

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    They are both from Forbes.

    It is explained here.
     
  9. loosecannon
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    loosecannon Senior Member

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    2 years and the fact that the second chart didn't list MXs social security values?
     
  10. william the wie
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    william the wie Gold Member

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    Bribery is such a huge component of the Mexican economy that the tax bill is a joke.
     

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